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House prices drop but getting on the property ladder is still difficult

First-time buyers have been among the worst casualties of rapidly rising house prices and stretched affordability levels in recent years. Now the house-price tide has started to turn, many will be hoping values are about to fall to a level at which they can finally get their foot on the first rung of the ladder. Let's not get too carried away, however: it's true prices have fallen over the past eight months, but average values are simply returning to the levels seen in February last year. The reality is that there is still a long way to go before getting on the ladder becomes truly affordable again.

While the affordability equation for first-time buyers is being helped by falling prices, any benefits are largely offset by changes in the terms of mortgage finance. A year ago, for example, it was possible for a first-time buyer to borrow more than 95%